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News Corp Australia CEO Peter Tonagh Named Head of Foxtel

He takes the reins at the pay TV company from Richard Freudenstein who departs after four and a half years.

Australian pay TV giant Foxtel announced Thursday that CEO Richard Freudenstein has stepped down after four and a half years to be replaced by current News Corp Australia CEO Peter Tonagh.

The change of leadership was swift and unexpected. Foxtel is jointly owned by News Corp Australia and telco Telstra Corp., and last year took a 15 percent stake in broadcaster Network Ten.

Local press reports say that Telstra may be preparing to sell out of the pay TV company, which has seen significant competition from new subscription VOD services like Netflix and local service Stan. It has also launched its own streamer Presto in the last year.

Fairfax Media reports that Telstra is considering a potential stock market float of its stake in Foxtel. The report said that Telstra could use an initial public offering process for all or part of its stake to extract a better price from News Corp.

News Corp reported in February that Foxtel revenue increased 5 percent in the three months ended Dec. 31 due to an uplift in subscriber numbers. It counted 2.9 million subscribers, up 7 percent compared to the prior-year period. Revenues were $598 million in the quarter.

Tonagh knows Foxtel and its operations well. Before his appointment to the helm of News in Australia, he had been joint Foxtel COO and CFO, working at the company for nine years.

Freudenstein said it had been “a privilege to lead Foxtel through the most dynamic and intensely competitive period of its history.”

He continued: "I am extremely proud to have worked with such a great team of people who have all helped deliver our strategic plans by achieving significant subscriber growth, reduced churn and a substantial lift in our investment in Australian programming."

During Freudenstein’s tenure, he oversaw the launch of Internet-based TV service Foxtel Go; streaming service Presto; a price reduction for new packages, which fueled growth; and the renewal of major TV sports rights deals.

“Foxtel is an incredible business with an exciting future and I look forward to building on Richard’s contribution to deliver the next stage of Foxtel's growth,” said Tonagh.

Freudenstein will leave Foxtel at the end of April, but will remain in his long-standing position as a News Corp member on the board of REA Group Limited (REA). News Corp's global CEO Robert Thomson thanked Freudenstein for his strategic direction and leadership of Foxtel and particularly welcomed his decision to stay on the REA board.

Freudenstein and Tonagh will work together to transition the Foxtel leadership over the coming weeks.